Monterra development: One case settled, another coming up

Two major lawsuits capping four years of litigation against the luxury Monterra Ranch development are coming to a head this month in Monterey County courts.

Local agribusinessman Roger Mills' company Monterra Ranch Properties Inc, and Monterey County Bank were named as defendants in both suits, one of which has reached a confidential settlement as the other heads into settlement talks Thursday.

Monterra development's website said around 60 lots are still unsold in the financially troubled 168-lot luxury subdivision straddling Carmel Valley and the Monterey-Salinas Highway corridor, where lots and homes have sold for several million dollars each.

Attorney George W. Dowell, who represents Santa Clara County-based South Valley Developers, said he couldn't comment on a confidential settlement reached this month in that company's fraud and breech of contract lawsuit against Mills, Monterra Ranch Properties LLC, as well as Monterey County Bank and its CEO Charles Chrietzberg.

Chrietzberg and an attorney representing Mills did not respond to phone messages left by The Herald.

Last year, Monterey County Bank settled several other suits filed by fellow banks regarding allegations the Monterey bank concealed information about financial troubles at the development.

Court records show the 2012 South Valley suit involved disputes over a gate that was supposed to built for the upscale development, as well as nearly $3 million in lots.

As a trial date neared after two years in court, a settlement was reached and the case dismissed on Dec. 4, court records show.

In its most recent Securities and Exchange Commission filing, Monterey County Bank noted in June that it had already written off the $365,000 it lent for the gate construction as a bad debt that will never be repaid.

Meanwhile, another lawsuit demanding nearly $10 million is scheduled for a court-ordered settlement meeting on Thursday.

For nearly three months starting in September, witnesses have testified in a nonjury trial for the Don Chapin Co.'s $1.4 million-plus lawsuit naming Monterra Ranch, Monterey County Bank and 15 other defendants. Chapin's company was hired to develop much of the development's infrastructure.

The court combined the Chapin case with another suit filed by the design and building firm Carmel Development Co. that asked for $6 to $8 million plus interest and fees, said attorney Robert P. Herendeen, who represents both companies.

Herendeen said the court ordered the confidential settlement talks, which are set to start in the Monterey chambers of Judge Thomas Wills at 9 a.m. Thursday.

If the negotiations don't end in a settlement, the trial will continue in January with more testimony and documents from the state's Department of Real Estate, Herendeen said.

"There's a lot of paper being pushed around," he said.

The financial collapse of Monterra left Roger Mills with more than $10 million in judgment liens against him since 2008, when the development's troubles came to light. The list doesn't include any judgement that may have resulted from this month's settlement.

Among those obligations are more than half a million dollars for a state tax lien from 2011, as well as numerous judgments related to Mills' farm business, which was shut down in 2008 after the Monterra development's collapse.

This fall, the state named Mills as the Central Coast's most delinquent taxpayer because of the back taxes owed.